Everyone seems to be getting sucked into social media. At the same time a large percentage of companies are using it wrong or using it without defining clear objectives.

Stephen Baker writes in Business Week: Beware Social Media Snake Oil

“As millions of people flock to these online services to chat, flirt, swap photos, and network, companies have the chance to tune in to billions of digital conversations.“

“But the same tools carry risks. Employees encouraged to tap social networking sites can fritter away hours, or worse. They can spill company secrets or harm corporate relationships by denigrating partners. What’s more, with one misstep, one clumsy entrée, companies can quickly find themselves victims of the forces they were trying to master. Thousands of bloggers attacked Motrin last year because of an advertisement from the Johnson & Johnson (JNJ) brand they found demeaning to mothers.

Over the past five years, an entire industry of consultants has arisen to help companies navigate the world of social networks, blogs, and wikis. The self-proclaimed experts range from legions of wannabes, many of them refugees from the real estate bust, to industry superstars such as Chris Brogan and Gary Vaynerchuk. They produce best-selling books and dole out advice or lead workshops at companies for thousands of dollars a day. The consultants evangelize the transformative power of social media and often cast themselves as triumphant case studies of successful networking and self-branding.

The problem, according to a growing chorus of critics, is that many would-be guides are leading clients astray. Consultants often use buzz as their dominant currency, and success is defined more often by numbers of Twitter followers, blog mentions, or YouTube (GOOG) hits than by traditional measures, such as return on investment. This approach could sour companies on social media and the rich opportunities it represents. “It’s a bit of a Wild West scenario,” blogs David Armano, a consultant with the Dachis Group of Austin, Tex. Without naming names, he compares some consultants to “snake oil salesmen.”

Can We Finally Change This Conversation?

It seems that online and off line conversations are consumed with measuring the ROI from social media. Much of the dialog is a waste of time and focused on the wrong thing. Yet organizations seem to be demanding a measure of ROI from this thing we all call social media. We’ve devoted a whole series to this discussion about ROI here

Using social media effectively demands mind-sets and capabilities that are unfamiliar and sometimes even counter intuitive to many business managers. It requires building trusting relations with your market, internal and external, rather than enforcing top-down out dated policies. Business managers should allow themselves and the entire organization time to unlearn and rethink everything before they “jumping into” social media. Most are following those who haven’t unlearned and rethought how, where, when,who, why and what they communicate which ultimately produces results, good bad and indifferent.

Results are the end result of how well and what people and processes communicate. You shouldn’t use social media until you know how well and what your people and processes communicate to all markets, internally and externally. Using it without knowing this is like jumping out of a plane with no parachute. Splat!

An ROI from social media doesn’t come from the tools rather the skills and knowledge on how to use them for a specific purpose, value creation. How much value do you create from use of your cell phone? Your email? and last but certainly not least your mouth!

Snake oil salesmen are known for avoiding questions during conversations, or flipping questions into other subjects. The reality is that any company wishing to measure the ROI from social media is asking the wrong question and avoiding the real issues. Just like a snake oil salesmen.

Tags: capital, commerce, conversational, currency, deragon, economy, innovation, integration, jay, media

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First paragraph says it all.